Overview of the Foreign Corrupt Practices Act E-Book

Martin T. Biegelman

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Global Finance Executive Select
• Sprache: Englisch

Seitenzahl: 48

Veröffentlichungsjahr: 2010

Beschreibung

This extract is from chapter 2 in Foreign Corrupt Practices Act Compliance Guidebook, by Martin T. Biegelman and Daniel R. Biegelman. The focus is on an understanding of the Foreign Corrupt Practices Act (FCPA) statute, its enforcement policies and penalties, as well as important case law and the role of government. It is not just large, multinational companies that are violating the FCPA; it is also smaller, private companies and individuals who are employing questionable practices. This chapter provides an overview of the statute and how it is applied to best ensure compliance.

Leseprobe

Contents

Cover

Title Page

Copyright

Chapter 2: Overview of the Foreign Corrupt Practices Act

FCPA PROVISIONS

LEVELING THE PLAYING FIELD

ANTIBRIBERY PROVISIONS

COMPLIANCE INSIGHT 2.1: METCALF AND EDDY CIVIL FCPA SETTLEMENT

BOOKS, RECORDS, AND INTERNAL CONTROLS PROVISION

SARBANES-OXLEY AND THE FCPA

OPINION PROCEDURE

PENALTIES

THIRD-PARTY AND SUCCESSOR LIABILITY

COMPLIANCE INSIGHT 2.2: SELF-DISCLOSURE FOLLOWS M&A ACTIVITY

WHY CORRUPTION MATTERS

COMPLIANCE INSIGHT 2.3: AFGHANISTAN: A CASE STUDY IN CORRUPTION

INCREASED ENFORCEMENT

NOTES

Copyright © 2010 by John Wiley & Sons. All rights reserved.

Disclaimer. This content is excerpted from Foreign Corrupt Practices Act Compliance Guidebook, by Martin T. Biegelman and Daniel R. Biegelman (9780470527931, April 2009), with permission from the publisher John Wiley & Sons. You may not make any other use, or authorize others to make any other use of this excerpt, in any print or non-print format, including electronic or multimedia.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

This extract is from Chapter 2 in Foreign Corrupt Practices Act Compliance Guidebook, by Martin T. Biegelman and Daniel R. Biegelman. The focus is on an understanding of the Foreign Corrupt Practices Act (FCPA) statute, its enforcement policies and penalties, as well as important case law and the role of government. It is not just large, multinational companies that are violating the FCPA; it is also smaller, private companies and individuals who are employing questionable practices. This chapter provides an overview of the statute and how it is applied to best ensure compliance.

Derived from Biegelman, Martin T., and Daniel R. Biegelman. Foreign Corrupt Practices Act Compliance Guidebook. Hoboken, NJ: John Wiley & Sons, Inc., 2010. 9780470527931; 384 pp.

978-0-470-90972-0 978-0-470-90971-3

CHAPTER 2

Overview of the Foreign Corrupt Practices Act

This chapter focuses on an understanding of the Foreign Corrupt Practices Act (FCPA) statute itself, as well as covering important case law and the role of government, specifically its enforcement policies and penalties. This chapter also covers the changes in the law over the years and important trends to be aware of in the FCPA arena. It is not just large, multinational companies that are violating the FCPA; it is also smaller, private companies and individuals who are employing the same corrupt practices. The best way to ensure anti-corruption compliance is to fully understand the FCPA statute and how it is applied.

FCPA PROVISIONS

The FCPA has two main parts: the antibribery provision and the accounting provision. The FCPA mandates that corporate records contain accurate statements concerning the true purpose of all payments made by the company. The law makes it a crime for American companies, domestic concerns, or foreign nationals doing business in the United States, as well as individuals and organizations acting on their behalf, to bribe any foreign government official in return for assistance in:

Obtaining or retaining business, or directing business to any particular personInfluencing a foreign government official to do or to omit an act in violation of his dutyInfluencing a foreign government official to affect an act or decision by a foreign government1

The FCPA not only makes it a crime to pay bribes to foreign officials, it also makes it a crime for publicly traded U.S. companies to make payments of any kind that are not on the books. Bribes are almost always disguised on the books as some other business expense rather than the true nature of the payments. This reduces the government's evidentiary burden because the very evidence the government will need in prosecutions can be found in the internal books and records. Government prosecutors do not have to prove a bribe, only that a payment was made and not recorded properly on the company's books.

In short, the FCPA makes it a crime for a company in the United States, for U.S. citizens, or their agents to obtain business by bribery of a government official of another country (or even conspire to do so from the United States), or for a publicly traded U.S. company to fail to record such a payment on its books. While the Department of Justice (DOJ) is responsible for bribery violations of the FCPA, the Securities and Exchange Commission (SEC) handles accounting violations of the FCPA. It is interesting to note that it is not a crime under the FCPA for an American company to pay bribes in a country where bribes are not illegal.

There are also specific exceptions granted in a 1988 amendment to the FCPA. American companies can pay facilitation fees to expedite permits, licenses, papers, visas, mail, and phone service, and to expedite the movement of perishable cargo. Further, it is not considered a bribe to reasonably reimburse public officials for expenses such as meals, travel, and lodging while the company is promoting, or demonstrating a product, or executing a contract. These expenses must not be excessive and must reflect bona fide charges. However, it must be kept in mind that these actions still may be illegal in the country where they occur.